{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}


ORIE_451_Homework__2 - salvage value(X of project B that...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
ORIE 451/551 Homework #2 Due February 8, 2008 1. Consider the four mutually exclusive projects given below. Project Investment at Time Zero IRR A $2,000 45% B $2,500 40% C $3,000 35% D $3,500 30% The service life for all the four projects is the same and investment is required only at time zero. Also, IRR(B-A) = 17%, IRR(A-D) = 15%, IRR(D-C) = 10%, IRR(B-C) = 20%. Which project would you prefer at a MARR of 13%? 2. Consider two mutually exclusive projects A and B. Assume that each project can be repeated indefinitely with the same cash flows. Find the
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: salvage value(X) of project B that would make both the projects equivalent at a MARR of 10%. 3. A machine costs $80,000 installed and $6000 per year to operate. At the end of its 8 year life it has a $15,000 salvage value. In year 5 a major overhaul is required at a cost of $30,000. Find the EAC at an interest rate of 12%. Textbook Problems 5-11, 5-33, 5-41, 5-45, 6-9, 6-13, 6-17, 6-25...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online